Correlation Between KCC Engineering and Korea New
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Korea New at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KCC Engineering and Korea New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCC Engineering Construction and Korea New Network, you can compare the effects of market volatilities on KCC Engineering and Korea New and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KCC Engineering with a short position of Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Korea New.
Diversification Opportunities for KCC Engineering and Korea New
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KCC and Korea is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network and KCC Engineering is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KCC Engineering Construction are associated (or correlated) with Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of KCC Engineering i.e., KCC Engineering and Korea New go up and down completely randomly.
Pair Corralation between KCC Engineering and Korea New
Assuming the 90 days trading horizon KCC Engineering Construction is expected to under-perform the Korea New. But the stock apears to be less risky and, when comparing its historical volatility, KCC Engineering Construction is 1.3 times less risky than Korea New. The stock trades about -0.05 of its potential returns per unit of risk. The Korea New Network is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 85,761 in Korea New Network on September 14, 2024 and sell it today you would earn a total of 3,339 from holding Korea New Network or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCC Engineering Construction vs. Korea New Network
Performance |
| Timeline |
| KCC Engineering Cons |
| Korea New Network |
KCC Engineering and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Korea New
The main advantage of trading using opposite KCC Engineering and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Korea New can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Korea New will offset losses from the drop in Korea New's long position.| KCC Engineering vs. Korea New Network | KCC Engineering vs. Solution Advanced Technology | KCC Engineering vs. Busan Industrial Co | KCC Engineering vs. Busan Ind |
| Korea New vs. Settlebank | Korea New vs. Dgb Financial | Korea New vs. BIT Computer Co | Korea New vs. CG Hi Tech |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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